U.S. Treasury Secretary Scott Bessent announced Monday that his department has launched a federal investigation into allegations that Minnesota tax dollars were funneled to the terrorist organization Al-Shabaab.
According to Fox News, Bessennt said the claims demand immediate scrutiny.
“At my direction, @USTreasury is investigating allegations that under the feckless mismanagement of the Biden Administration and Governor Tim Walz, hardworking Minnesotans’ tax dollars may have been diverted to the terrorist organization Al-Shabaab,” Bessent wrote on X.
He added that the department is moving swiftly, “thanks to the leadership of @POTUS @realDonaldTrump,” to ensure Americans’ tax dollars are not supporting global terrorism. “We will share our findings as our investigation continues,” Bessent said.
Walz’s office responded by pointing to the governor’s comments last week, when he said that if any link between Minnesota funds and Al-Shabaab exists, he welcomes a full investigation.
The controversy stems from a report published last month by researchers Ryan Thorpe and Christopher F. Rufo of the Manhattan Institute. Their findings outlined a sprawling fraud scheme involving Minnesota’s Medicaid Housing Stabilization Services program, Feeding Our Future, and additional organizations.
Thorpe and Rufo reported that members of Minnesota’s Somali community were responsible for significant portions of the fraud, and that federal counterterrorism sources confirmed millions of dollars in stolen funds were ultimately transferred to Somalia, where Al-Shabaab was able to access the money.
Seeking to understand the scale of the operation, the investigators examined where the funds flowed.
They noted that roughly 40% of Somali households receive remittances from abroad, and that in 2023 the Somali diaspora sent an estimated $1.7 billion back to the country—an amount exceeding the Somali government’s own budget.
According to their report, stolen funds were routed to Al-Shabaab through a network of money traders known as hawalas. Multiple law enforcement sources told the investigators that these transfers were facilitated by Somali residents in Minnesota moving large sums overseas.
Glenn Kerns, a retired Seattle Police Department detective who worked for 14 years on a federal Joint Terrorism Task Force, described the networks as sophisticated and sprawling.
“We had sources going into the hawalas to send money,” Kerns said. “I went down to [Minnesota] and pulled all of their records and, well, s—, all these Somalis sending out money are on DHS benefits.”
A confidential source told the researchers that “The largest funder of Al-Shabaab is the Minnesota taxpayer.”
Another former Minneapolis Joint Terrorism Task Force official said, “Every scrap of economic activity, in the Twin Cities, in America, throughout Western Europe, anywhere Somalis are concentrated, every cent that is sent back to Somalia benefits Al-Shabaab in some way.”
The Treasury Department did not provide a timeline for the investigation but emphasized that its probe is already underway.
